Chapter 1 Introduction to Federal Taxation and Understanding the Federal Tax Law

1861 words 8 pages
543

Chapter 1
Introduction to Federal Taxation and
Understanding the Federal Tax Law
TRUE-FALSE QUESTIONS—CHAPTER 1
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The majority of dollars collected by the U.S. government come by way of corporate taxation.
Prior to the Sixteenth Amendment direct taxes were illegal.
All U.S. taxes are based on an individual’s income.
Customs taxes are imposed on exports to protect our natural resources from leaving the country. Also, some states tax natural resources, and some countries restrict and tax the amount of natural resources leaving their country.
Property taxes are a major source of revenue for the
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c. both (a) and (b).
d. neither (a) nor (b).
42. The sections of the Internal Revenue Code are amended
a. by the Joint Committee on Taxation.
b. by the House of Representatives.
c. by public laws.
d. by the Senate.
43. An exaction for revenue, such as the income tax, supports government functions like which of the following: a. provide for the general welfare.
b. provide for the common defense.
c. pay national debts.
d. all of the above.

©2010 CCH. All Rights Reserved.

Chapter 1

546

CCH Federal Taxation—Comprehensive Topics

SUPPLEMENTARY PROBLEMS—CHAPTER 1
44. If the current U.S. deficit remains high, what options are available to Congress and the President?
45. What is meant by the phrase “pay-as-you-go” tax system?
46. If taxpayers believe that tax rates will increase in the future, what tax planning steps might they take to minimize their tax bills?
47. Some people maintain that corporations should not pay taxes. Explain.

Chapter 1

©2010 CCH. All Rights Reserved.

547

Testbank

ANSWERS TO TRUE-FALSE QUESTIONS—CHAPTER 1
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False. Individuals contribute the majority of dollars.
True.
False. No, there are also excise and customs taxes. The income tax is but one tax that is used.
False. On imports.
False. For local governments.
True.
True.
True.
True.
False. No, several tax reform

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